25. In the LM Partnership, Laura and Maria had a capital ratio of 3:1 and a profit and loss ratio of 2:1, respectively. They used the bonus method to record Nora's admittance as a new partner. What ratio should be used to allocate, to Laura and Maria, the excess of Nora's contribution over the amount credited to Nora's capital account? O a Laura and Maria's new relative capital ratio b. Laura and Maria's new relative profit and loss ratio

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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25. In the LM Partnership, Laura and
Maria had a capital ratio of 3:1 and a
profit and loss ratio of 2:1, respectively.
They used the bonus method to record
Nora's admittance as a new partner.
What ratio should be used to allocate,
to Laura and Maria, the excess of
Nora's contribution over the amount
credited to Nora's capital account? *
a. Laura and Maria's new relative capital ratio
b. Laura and Maria's new relative profit and
loss ratio
c. Laura and Maria's old capital ratio
O d. Laura and Maria's old profit and loss ratio
Transcribed Image Text:25. In the LM Partnership, Laura and Maria had a capital ratio of 3:1 and a profit and loss ratio of 2:1, respectively. They used the bonus method to record Nora's admittance as a new partner. What ratio should be used to allocate, to Laura and Maria, the excess of Nora's contribution over the amount credited to Nora's capital account? * a. Laura and Maria's new relative capital ratio b. Laura and Maria's new relative profit and loss ratio c. Laura and Maria's old capital ratio O d. Laura and Maria's old profit and loss ratio
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